Retailers are calling for more financial support from the government after the UK’s Covid lockdowns in 2020 cost £22bn in lost non-food sales.
The high street was hit by its biggest fall in sales for non-food stores on record – down 24% – as footfall decreased by two-fifths, according to data from the trade body the British Retail Consortium (BRC). While many retailers continued to sell online, that did not make up for sales lost from shops. Profits were also affected by the cost of setting up and operating home delivery systems.
Central London has been one of the hardest hit parts of the country; the loss of tourists and many commuters contributing to a surge in closures of shops and other high street businesses. The number of empty units in the City of London increased by 47% last year as the number of workers and visitors slumped, according to figures from analysts at Local Data Company.
Takeaway food outlets, bars, pubs and coffee shops were among the most badly affected in the City, as well as specialist shirtmakers.
However, the steep rise in empty high street outlets in the Square Mile still left it better off than the rest of England, Wales and Scotland, with 11.4% units vacant compared with 13.7%.
Helen Dickinson, the chief executive of the BRC, said: “After 2020 proved to be the worst year on record, it is essential that the chancellor uses the spring budget to support those businesses hardest hit by the pandemic. Vital support in the form of an extension to the business rates relief and moratorium on debt enforcement, as well as removing state aid caps on Covid business grants, would relieve struggling businesses of bills they cannot currently pay and allow them to trade their way to recovery.”
Retailers have benefited from a rates holiday since last April, but are worried about the planned resumption of the tax this April.
A moratorium on commercial evictions, which has protected struggling retailers, pubs and other high street businesses from being thrown out of premises if they are unable to pay rent, is also due to end next month.
Dickinson said additional government financial assistance was needed to support the jobs of hundreds of thousands of retail workers.
The BRC’s latest call for action comes after business leaders, including those of Tesco, B&Q and Waterstones told the chancellor, Rishi Sunak, that the business rates burden on shops was putting thousands of high street jobs at risk and that online retailers should pay their fair share of tax.
In a letter sent before next month’s budget, retailers and landlords said the current system was “not sustainable in the long term and without reform, shops at the heart of communities will be at risk”.
Last year, the government launched a review of the business property tax, and is due to report back in the spring.
The review is considering a variety of options including shifting the balance between online and physical shops by introducing a web sales tax.
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